8-23-19

Bond markets are sending one big global recession warning

(CNBC) – The U.S. bond market just flashed what could be its biggest warning yet of a coming recession, and it is not alone. The spread between the 2-year Treasury yield and the 10-year yield flipped so that the 2-year was higher than the benchmark 10-year yield for the first time since June 2007. Other parts of the curve have already inverted, but traditionally the 2-year to 10-year spread is the most widely watched by market players. The U.S. 30-year bond yield fell to a record low early Wednesday, touching 2.015% for the first time ever, dropping through its prior record of 2.08%. Yields across Europe fell, and the German

10-year bund touched a new low of negative 0.65%. The long end of the curve, or the 10-year and 30-year yields, are reflecting fears about the global economy, so, therefore, rates have been declining. But the shorter end, the 2-year has not been declining as quickly, since it reflects the Fed funds rate, which is still above 2%. An inverted yield curve has been a reliable recession indicator, but it does not always precede an economic contraction and the length of time before a recession occurs has varied. According to Credit Suisse, the average length of time since the late 1990s for a recession to occur after inversion was 22 months. CONTINUE

Mike Huckabee: Why the US economy needs tax cuts

Fox Business     Former Arkansas Governor Mike Huckabee explains why tax cuts are a boon to the U.S. economy.

One of the Largest “Too Big to Fail” Banks in America Boldly Declares That “the Wheels for a Slowdown Are in Motion”

Now even one of the biggest banks in the entire country is openly admitting that a “slowdown” is upon us.  Over the past week or so, the mainstream media has been filled with chatter about the possibility of a recession and what that would mean for the Trump campaign in 2020, and we continue to get more evidence on a daily basis that economic activity really is decelerating.  All of the numbers are pointing in the same direction, and I am going to share some brand new figures with you in this article.  But first, I want to address what Morgan Stanley just released to the public.  In a note that was just published,

Morgan Stanley’s chief economist unequivocally stated that “the wheels for a slowdown are in motion”…  The downtrend in some global economies is becoming contagious as weakness in the manufacturing sector begins to spread, according to Morgan Stanley, which warned clients that “the wheels for a slowdown are in motion.” “Even as we have been revising our growth projections lower, we continue to highlight that the risks remain decidedly skewed to the downside,” Chetan Ahya, the bank’s chief economist, warned in a note published Tuesday. “We expect that if trade tensions escalate further … we will enter into a global recession (i.e., global growth below 2.5%Y) in three quarters.” READ MORE

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